If you’ve been in business for a while or if you follow the corporate world, you’ve probably come across the term SWOT analysis.
This is a technique that is used to evaluate your business and get a better understanding of your position in the industry. It involves identifying your company’s Strengths, Weaknesses, Opportunities and Threats.
This analysis is easy to do and should be done about every two years. It is a powerful tool to help you understand what you are doing right and what needs to be changed.
Starting with your strengths, make a list of all the things your company does exceptionally well. How have you maintained a competitive edge in the marketplace? What do your past and current customers love about you? What is your unique selling point? Do you have proprietary resources that your competitors do not have? This is a chance to affirm what is working and to celebrate the success you have had.
Now, focus on your weaknesses or the areas of your business that need to be improved. This can include such things as a need to change the organizational structure of your company, not having enough skilled employees, dealing with a limited budget, not standing out from the competition or not having a clear marketing strategy. Are you getting negative reviews and are you losing customers? Take a hard look at what is stopping you from being successful.
After you’ve taken a good look at your weaknesses, open your mind up to new opportunities for growth and higher profits. Are there new products or services you can explore? Has the changing market opened up diversification opportunities? Is this the time to invest in research and development? What can you do to streamline production, save money and beef up the bottom line? Can you invest in new tools for higher efficiency? Would an overhaul of your brand messaging be a good thing? These are the kinds of questions you should ask yourself while dreaming big and thinking large.
Now, without allowing your anxiety levels to rise, the last step is to identify any potential roadblocks, external forces, market shifts, changes in the law, new competitors, or any other obstacles that pose a risk to your company. Threats could include technological advancements that make certain services or products obsolete, changes in the global economy that require you to alter the way you operate, any ongoing repercussion of the pandemic, or a high employee turnover that could threaten your current growth.
This kind of SWOT analysis is so important because it allows you to better refine your business, tackle economic challenges and refine your strategic plan for the future. If you’ve done a good job in your analysis, putting together a detailed plan will be much easier.
Every smart business owner will pause periodically to do a SWOT analysis. It’s kind of like going to the doctor for an annual physical. It’s a great way for your business to stay in good health.